June 25 (Bloomberg) -- A Nokia Oyj advertisement in the
Paris metro shows a mobile phone packed with applications, from
the French yellow pages “Pagesjaunes” to “ Le Monde.fr” and
“Scalado Photo Twister.”

The marketing effort to take on Apple Inc. in France, the
biggest iPhone market outside the U.S., is among the Finnish
company’s steps to reclaim lost momentum by putting apps at the
center of its smartphones campaign. The world’s biggest maker of
mobile phones also placed ads with apps in free newspapers on
the London Tube and is embedding software trainers in its local
sales units to attract more developers to its Ovi Store.

“Apps are going to be more central to Nokia’s
conversation,” Purnima Kochikar, 42, who heads the Forum Nokia
developer-support unit for the Espoo, Finland-based company,
said in an interview. “It’s no longer about selling devices.”

Twelve years after it began working with outside
developers, Nokia is struggling to claw back ground lost to
Apple, whose apps-rich devices are flying off store shelves.
Nokia’s catch-up effort is an acknowledgment it has failed to
capitalize on its 41 percent share of the smartphone market to
become the platform of choice for software writers.

Apple may extend gains after the iPhone 4 sold 600,000
handsets in pre-orders before its debut yesterday, when it was
expected to sell a record 1 million units.

IPhone’s first-quarter share of the smartphones market rose
to 15.4 percent from 10.5 percent a year ago, while devices that
run Google Inc.’s Android software soared to 9.6 percent from
1.6 percent, according to Gartner Inc. Symbian, Nokia’s main
operating platform, slid 4.5 percentage points to 44.3 percent.

‘Brainwashed’

“Forum Nokia is improving some areas of what they’re
doing, but the biggest issues Nokia faces have been elsewhere,
in the devices or the software or the discovery mechanism for
the apps,” said Martin Garner, a London-based analyst at CCS
Insight. “There is much more profile-raising being done. It’s a
good idea. Unfortunately Apple has paved the way.”

Kochikar, a former manager at Verizon Communications Inc.
and an entrepreneur who joined Nokia in 2003, says the company’s
performance in apps shouldn’t be measured by the number of items
in its Ovi Store, which Nokia has refused to disclose. Apple
claims 225,000 iPhone and iPad applications while Google’s
Android Market, which is also winning favor from developers, has
about 80,000 according to AndroLib.com.

“I think the market has been brainwashed to think it’s
about counting apps,” Kochikar says, citing Vuclip, a Web-based
video service for mobile phones, and mPedigree, a text-message
based service for drug authentication in Africa. “If you look
at all these apps they’re not in a store.”

Falling Short

Kochikar, who began running Forum Nokia 11 months ago, is
part of Nokia’s new front, led by the recently appointed
smartphones unit chief Anssi Vanjoki, to show its devices are as
cool as iPhones. As Nokia gears up for the third-quarter
unveiling of the N8, its first device running the Symbian 3
operating system improved for touchscreen phones, it has its
best chance yet to deliver on that promise.

Nokia’s current high-end smartphones have fallen short of
the expectations raised by the iPhone, forcing the company to
cut its outlook for sales and margin. Nokia this month lowered
its full-year margin target for the second time this year.

Nokia shares have fallen to their lowest level since Oct.
1998 at about 6.8 euros. They have tumbled 24 percent this year,
giving the company a market value of 25 billion euros ($31
billion), about a tenth of Apple’s $246 billion and slightly
less than Research In Motion Ltd., the Canadian maker of Qwerty
keyboard BlackBerry phones.

Too Much Effort

“If Nokia continues down its existing path, betting on
Symbian, it will always be one or more steps behind Apple and
Google as well as a low priority for applications developers,”
Adnaan Ahmad, a London-based analyst for Berenberg Bank wrote in
a report dated June 24. He would prefer to see Nokia switch to
Android, he wrote.

Nokia yesterday said future models of its N series of high-performance devices will be based on MeeGo, an operating system
it is developing with Intel Corp. The company said last year
that it would use the new software on its most powerful mobile
devices while continuing to develop Symbian.

Kochikar’s team is charged with introducing developers, who
have long complained about the difficulty of Nokia’s smartphone
platforms, to the better tools, including Qt, a cross-platform
development environment that could be a “secret weapon” for
Nokia, according to Garner.

‘Boredom Buster’

“To develop apps of the same functionality on the iPhone
and Nokia, you’d be looking at three, four times as much effort
on Nokia,” says Andy Nugent, a director of Manchester-based
Ravensoft Ltd., whose Battery Extender app notched up more than
a million copies after featuring on Ovi. “We really like the
push toward Qt. It’s easier, you get better-looking results.”

The Qt tools for mobile released this week will enable
developers to run their new Symbian 3 apps on older devices as
well as Nokia’s future Linux-based platform MeeGo, giving them a
an easy way to reach the world’s biggest smartphone base.
Earlier apps needed to be reworked for different Nokia models.

Nokia has also waived the requirement of forming a company
before listing apps on Ovi Store and is helping advertise apps.

Longtime Symbian developer Richard Hazenberg, chief
executive officer of Lunaforte, an Amsterdam-based developer of
games and other “boredom buster” applications, says he
appreciates the publicity boosts Nokia can give.

Crowded Market

“It’s a very crowded market so if you have ways to reach
the consumer that’s much more important for us than the tool
side of things,” says Hazenberg, who has over 6 million
downloads on Ovi. “The ability to do marketing with Nokia has
been the biggest step forward.”

Nokia reports the number of downloads on Ovi Store at more
than 1.7 million a day, and says 75 percent of them are apps.
Many other developers have had millions of downloads on the
store, including the Shazam music identifier service and the
Nimbuzz social messaging interface, Kochikar said.

Kochikar acknowledges that many of the 4.5 million
developers registered with Forum Nokia are “prospects” whom
the company hopes to convert to active development on one of its
platforms, especially as it starts selling the N8.

“If the N8 is a hit, and its brothers and sisters when
they come out, developers will start to take Nokia more
seriously,” says CCS Insight’s Garner. “If it isn’t, that
won’t be Forum Nokia’s fault. There is so much that they can do
and they are working on it but the success rate is not only up
to them.”